Juneteenth is celebrated as a day of liberation, and now some are calling for the holiday to spotlight financial freedom. The median net worth of Black families in the U.S. at about $24,000, compared to white families at $188,000, according to a Federal Reserve study, sparking a conversation to help build generational wealth for Black households on the recently added federal holiday. Alfred Edmond Jr., the SVP and the executive editor-at-large of Black Enterprise, joined Cheddar to discuss wealth-building tips. ”We need to think about investing more in black-owned businesses. We need to challenge both public government and corporations to invest in the growth and the scale of black-owned businesses so that you have a kind of a force multiplier effect when it comes to jobs and capital creation," he said.

Opening Bell

Juneteenth Reignites Calls to Build Generational Wealth Among Black Households

here to discuss more. Alfred Edmond junior senior vice president and executive editor at large of black enterprise. Thank you so much for joining us when you hear those numbers. It is evident that this is a huge gap. Talk to us about the barriers that black households face when it comes to building wealth Asia. This is a great topic to talk about when we talk about juneteenth because juneteenth really is about unfinished business. We know that in texas they found out later that that the emancipation proclamation ended slavery began unfinished business. But what we have here is a racial wealth gap that was created because being freed did not include economic inclusion. So the racial wealth gap didn't just come up overnight. The system was built, the system that undergirded slavery also blocked black people from everything from owning homes, owning land to entering the financial markets to buying stocks and bonds and the remnants of that still exist today. So it really is an important topic to focus on, not just for black americans but for all, americans are seeing juneteenth as a, as a chance to address unfinished business of economic inclusion in America. Yeah, it's also worth noting just the power behind black spending, black spending power reaching a record $1.6 trillion 2021. While net worth among African Americans fell over the last two years. How do you think people can reframe their spending to either re circulate dollars into the black community or save more. Well, what we have now today is it's a lot easier to target spending with black-owned companies. Black-owned businesses in part because of social media, in part because of the targeted marketing that small black-owned businesses can do to really reach their customers to be invisible. So spending more with black-owned business is an important part. But we need to be clear, you're not going to close this huge more than 10-1. Um, depending on whose numbers you believe racial wealth gap simply by spending more black owned businesses, we need to think about investing more in black owned businesses. We need to challenge both um public government and corporations to invest in the growth and the scale of black owned businesses so that you have a kind of a force multiplier effect when it comes to jobs and capital creation. So spending more black people spending more with black businesses is only part of the equation. Yeah, I'm really glad that you point that out, especially as we've seen, corporations kind of trying to navigate this new landscape with juneteenth as a federal holiday. What do you think everyday people can do to hold these corporations and also the government accountable for these kinds of investments? Well, again, we know we're coming through this period, the post George Floyd murder window, if you will, where a lot of corporate corporations made pledges to challenge economic and systemic racism and equity, juneteenth is a perfect time to say, listen, yes, the emancipation proclamation, juneteenth was a beginning of creating freedom for african americans, but we know that freedom is not complete until we have economic equity and corporations are stepping up to say, okay, we're gonna invest in black owned businesses, we're gonna create capital for black owned businesses. We're gonna, we're gonna educate black people more and provide more resources around everything from credit management to mortgage lending. So it's about reducing the barriers and pouring more money into black businesses and black communities. Yeah, Alfred I want to take things back to black families during this time as well though, we know we talk about it every day now on cheddar, just the higher prices of everything from grocery stores to the gas pump. And I'm wondering if you have steps that black households can take to improve their financial well being, especially right now. Well, in the short term, it's very important to limit debt. If not reduce debt. Obviously debt and the interest payments you make on on debt payments eats into your spending power eats into your ability to save. The second thing is really to be serious about saving and you got to be serious about saving all the time, not just when prices are going up. If you're serious about saving, when prices are low, then you actually have more resources to carry you through. When prices go up, wealth building is a long term game prices are going to go up. Sometimes prices are gonna go down the economic system and the economic winds will blow in different directions over time. The key to wealth creation over time is to stay committed to asset accumulation, consistent saving and consistent control of your debt so that you can ride out these um up and down economic, uh you know, trends. We also know we've been following the Fed announcements really closely interest rate hikes leading to pressure on housing market and mortgage rates. And we think about home ownership as a major gateway when it comes to generational wealth. What kind of investments do you think black families can be looking to during this time again, when it comes to making those investments for the long term, not just for this generation, but beyond. Well, there's the two things you always want to remember is diversification and delayed gratification. Here's what I mean, there's no single investment, that's the investment for an inflationary time. The key to wealth creation is to have, You know, a variety of investments ranged from stocks, bonds, real estate, you should be maxed out in your 401K. Plan to get access to any kind of retirement savings plan so that you have different assets spread across different asset classes because in different economies, certain assets gonna do better than others. So you need to have a balanced portfolio and you need to have a financial advisor to help you to understand how do you balance out that portfolio? But the key here is to remember again, it's a long term game. I always tell people maybe this isn't the right time to buy a house for example. And home ownership is a key key foundation to building wealth. Well, you should still be budgeting and saving for that down payment for your home, even if you think the prices are too high for you to actually afford one right now. So the time now is the right now when home prices are very high to start budgeting and putting aside money towards your down payment and other home home cost so that wind prices come back down and they will, you'll be ready, you'll have the money put aside so you can't wait until the prices come down to take advantage of opportunity. You need to be doing that now offered last question for you. Um, you know, as we talked about earlier, social media is a huge tool in our arsenal when it comes to education and awareness, just getting information out, especially when it comes to finances. How do you hope that this generation uses social media as an educational tool to building awareness around financial futures? Well, I'm very, very encouraged by that because we're already seeing it, especially with generation the millennials, generation y and generation Z. They're absolutely engaging and sharing financial information on social media. There are more financially savvy than previous generations as a result they follow black enterprise for example, on instagram facebook live linkedin on our Youtube channel where they get exposed to not only information but other experts and finances. People like Ash, cash exam test, Keyshia and Williams. I could drop tons and tons of names but you got a whole generation of young people I would say millennials and younger who are now not only learning, but they're sharing it on their social media platforms. And that's very, very encouraging. So you can really get a good education as anybody. Any age group by just following certain accounts on social media, go to black enterprise dot com. Follow black enterprise on social media and you'll get connected to a whole army of people who can be a big part of your financial education. Such good information. Thank you so much for joining us. That's Alfred Edmonds, junior Senior vice president and executive editor at large of Black Enterprise.